NY Appellate Court Holds Trial Court Erred in Proceeding Challenging Status of Sign

This post was authored by Matthew Loeser, Esq.

Respondent NYC Department of Buildings (DOB) issued a notice of violation (NOV) to a property owner for displaying on the building an outdoor advertising sign for “Kickstart” in a residential district in which such signs were prohibited under the New York City zoning resolutions (ZR). Petitioner argued that the advertising sign was a legal nonconforming-use under the ZR, as the sign had been displayed there since before 1961, without any break exceeding two years. However, in a hearing regarding the violation, an administrative law judge (ALJ) sustained the notice of violation and imposed a fine. Petitioner filed a Zoning Resolution Determination Form (ZRD1) with DOB’s Manhattan Borough Commissioner seeking a determination as to the legality of the sign. The Commissioner denied the application, but later reversed his decision. Petitioner then sought administrative review of the ALJ’s determination by respondent NYC Environmental Control Board (ECB). The ECB affirmed the ALJ’s determination that the sign was illegal. Neither petitioner nor DOB had informed ECB of the decision on petitioner’s ZRD1 application. Petitioner then commenced an article 78 proceeding seeking to annul ECB’s decision. The court found that the ZRD1 approval in effect at the time ECB issued its determination effected an automatic vacatur of the NOV and the ECB decision, and concluded that DOB’s subsequent determinations revoking the ZRD1 approval and finding the sign illegal were arbitrary and capricious.

On appeal, the court held there was no basis for the conclusion that the ZRD1 determination had the legal effect of automatically vacating the NOV. The court found that the ZRD1 approval was not a jurisdictional fact that allowed the court to review materials outside the administrative record. As such, the trial court exceeded its jurisdiction by considering the ZRD1 determination. Furthermore, the court found the petitioner was required to exhaust its administrative remedies before ECB prior to seeking judicial review of ECB’s decision. Specifically, the court noted that petitioner could have brought an article 78 petition for the vacatur of the decision on the ground that respondents acted arbitrarily in failing to withdraw the NOV in light of the ZRD1. Accordingly, the trial court’s holding was reversed.

Jan Jan Realty Corp v New York City Environmental Hearing Control Board, 160 A.D. 3d 421 (1 Dept. 4/3/2018)